Right now, there’s something of an obsession with the concept of “last mile” delivery in the logistics industry. Companies have largely solved the problem of getting costs down for 99 percent of the journey to the customer, thanks to a combination of giant trucks and ships, but the issue of expense for the last mile remains. Why?
Last mile delivery is a little bit like bespoke manufacturing. Each customer lives at a different address, so you have to navigate your way to their home and unload the item manually. It pushes up costs, as single runs do in manufacturing, and means that delivery prices are much higher than they could be.
A new generation of entrepreneurs wants to deal with the issue of last-mile delivery using technological methods. The goal is to bring down the cost of last-mile delivery by an order of magnitude, making e-commerce a more attractive option.
One of the reasons that last mile delivery is expensive is because of the risks involved. When truck drivers have to take new routes, they are more likely to make mistakes. As this truck accident lawyer points out, more than one in ten accidents on the road involve a large vehicle. The search is on, therefore, for methods that will eliminate risk in the last mile of delivery, cutting insurance costs and making things safer for workers.
The main innovation in this area right now is the delivery locker. Amazon already has a network of cabinets up and down the country where delivery drivers can deposit items for customers to collect at a later time.
The way delivery lockers works are simple. Customers order the goods that they want from an online retailer and select deliver locker as the delivery option. The retailer then sends the products out through its logistics network and delivers them to the locker, alongside deliveries for other customers for that particular day. Customers then get a code in their email, telling them what they need to punch into the console on the locker display.
Online retailers place delivery lockers in locations that their customers frequent on a regular basis, including gyms, banks, and other locations. The idea is to avoid the last mile of delivery by incorporating delivery solutions into customers’ daily lives. It’s a smart idea and one the industry will be tracking closely.
What else can businesses try to get the cost down? The second option is to use route optimization technology. It might sound simple in concept, but optimizing routes is a notoriously tricky mathematical problem. In fact, it’s so hard that traditional computers can’t do it.
The problem is that when you have more than, say, twenty deliveries to make, there are so many route options that it is hard to find the combination that will be the quickest. What you really need is a quantum computer. But until they become available, companies are having to make do with heuristic solutions – and fortunately, they’re getting better at it.